1. AGRICULTURAL CREDIT LEGISLATION AND THE TENANCY PROBLEM.
- Author
-
Putnam, George E.
- Subjects
AGRICULTURAL credit laws ,AGRICULTURAL credit corporations ,AGRICULTURE finance ,AGRICULTURE ,RURAL credit - Abstract
This article discusses issues related to the agricultural credit legislation and the tenancy problem in the U.S. The establishment of a land credit system suitable to the needs of farm tenants is clearly beyond the province of private initiative. The problem can be dealt with only by direct governmental aid. There is, however, a well-defined field for private enterprise in rural credit reform. When the states have provided for the incorporation and regulation of land credit banks, authorized to make long-term loans on the security of farm lands and to provide capital through the sale of land-mortgage bonds, the long-term credit requirements of landowners can be readily supplied by institutions conducted for profit. It is not to be expected that these institutions will greatly reduce the farmer's rate of interest. An improvement in the method of making loans is much more to be desired. But, by giving greater mobility to private capital and eliminating some of the waste in the present land credit system, they can at least give the farmer a rate of interest commensurate with the security he has to offer. The enactment of laws governing the formation of these companies would solve the problem of long-term credit for landowners. In addition, it would be well to exempt the bonds from taxation, proscribe some of the objectionable features in the foreclosure and exemption laws, and improve the system of land-title registration. While it is indeed certain that a state could establish a strong centralized bank or adopt a program of state loans that would reduce the farmer's rate of interest below the rate that can be profitably offered by competitive land credit companies, such a course of action is without justification.
- Published
- 1915